Markets

Bourse hiccups tied to ex-Microsoft chief

By Chen Limin (China Daily)
Updated: 2010-07-14 09:53

Tang Jun's biography "My success could be copied", remains on book store shelves in Beijing as of Monday. [China Daily]

BEIJING: The fallout over the former president of Microsoft China's academic credentials appears to have overflowed onto companies related to him, which have seen their stock prices fluctuate in recent days.

Former Microsoft chief Tang Jun was first accused of fabricating a doctoral degree from California Institute of Technology July 1 by Fang Zhouzi, known as the "science cop" for battling against plagiarism and academic fraud in China.

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Fang's claim quickly created a media stir that may have sparked a decline in the stock price of New Huadu Industrial Group Co Ltd, a Fujian province-based company in which Tang is president and chief executive officer.

The share price of the company fell from 17.68 yuan on June 30 to 16.87 yuan on July 5.

Huadu share price rebounded to 17.10 yuan on July 6 when Tang clarified he never claimed to have graduated from the California Institute and that he actually received his doctorate from California-based Pacific Western University.

"Tang's event surely put some pressure on New Huadu in the short term," said Gao Kun, an analyst with Dongxing Securities.

The Chinese media has also speculated that the company will dismiss Tang, but he stated on July 12 that he was not about to leave the company, according to China National Radio.

The timing of another share price dip has also fueled media speculation that the fluctuation was attributed to Tang. Shanda Interactive Entertainment Ltd, a Nasdaq-listed technology company where Tang used to work as president, saw its share price fall from $39.67 on June 30 to $37.59 on July 9.

Despite the changes in stock prices, Tang's ordeal is not expected to have substantial impact on the companies, said analysts.

"The only thing that matters are the companies' performance in their industry," said Li Zhongzhi, an analyst with Ping An Securities Limited.

Shanda's prospectus in 2004 states "Tang holds a doctorate degree in electrical engineering from Pacific Western and a doctorate degree in electronics from Nagoya University, Japan".

Meanwhile, business website Caing.com reported on July 8 that Tang once said on a China Central Television program that he had not obtained a doctorate degree in Japan.

If the prospectus proves to be false, Shanda may face questioning or a law suit, Li added.